Donald Trump’s next mission is to reform and simplify the US tax system. I was not sure whether he would be able to repeal Obama Care (he wasn’t). However, I am certain that he will fail in his endeavours to introduce any meaningful tax reform in the US. The US has an incredibly complex system of tax built up over decades and resembles a Gordian knot, which not even Alexander the Great would be able to untangle. At its heart lies the ability of US multinationals to retain their profits offshore in untaxed form. However, if they remit these profits to the US they become taxable. This means that there are approximately $2-trillion in untaxed profits outside the US. Apple, Microsoft and Google all hold huge amounts outside the US. Apple has approximately $181bn outside the country. The US taxes companies at a rate of 35%. If Apple repatriated its profits, it would lose approximately 40% to a combination of federal and local taxes. The US’s corporate tax rate is one of the highest in th...
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